Responsible investing and Framlington equities

What is the process within the platform for integrating ESG?

At Framlington equity we ensure a 360° approach to company evaluation through three steps:

1/ Quantitative

The first step relies on incorporating the internally-developed ESG scores into our front office tools, internal research models and risk reports. The score of each company is a starting point to understand how they are positioned on each of the ESG criteria/sub criteria and how this score has developed over time.

2/ Qualitative

Our intention is to go beyond a pure quantitative scoring to gain a detailed and prospective knowledge of how a company is intending to respond to ESG challenges. This type of analysis is undertaken when we visit companies and meet management teams face-to-face to discuss and understand how their ESG and sustainability policies and practices are supporting their long-term strategic goals.

3/ Engagement

We see ourselves as key influencers in helping to create better and more responsible corporate behaviours and disclosure. We view ESG integration as part of expressing our conviction as long term responsible investors, avoiding negative issues that can damage portfolio returns but also influencing management to take the right steps towards enhancing their sustainability profile and practices.

How has ESG evolved within the platform?

Framlington Equities has always acted as a long-term investor that aligns its investment strategy to industry trends, develops a deep understanding of the companies, their management team and the success of their business model. We have been pioneering the management of RI portfolios since the launch of our first RI mandate in 1998, focusing on European small and mid-cap companies supporting employment in France.

As long-term investors, non-financial risks and factors have always been integrated into our analysis and we now integrate ESG considerations into investment decisions, with an increasing number of our strategies becoming ESG integrated under MiFiD II. We have three ESG analysts* embedded within the investment team, providing a view on company ESG risks and opportunities on a proactive and reactive basis.

*AXA IM as at  31/10/2018